By Joshua Burd
Led in large part by northern and central New Jersey, industrial leasing in the Northeast bounced back in April after a slowdown earlier in the year.
New research by CBRE found that New Jersey, the outer boroughs of New York City, the Philadelphia metro and Pennsylvania’s I-78 and I-81 corridor “posted a significant uptick in activity” last month after a decline in February and March. The report pointed to government shutdowns in the three states, noting that quarantined consumers are spending even more on e-commerce and adding to what was already a blistering demand for industrial space.
To that end, the biggest demand drivers are retailers looking to quickly expand e-commerce operations, traditional e-commerce companies and third-party logistics firms, CBRE said. In northern and central New Jersey, e-commerce demand for warehouse space accounted for 43 percent of industrial leasing activity at 1.16 million square feet, while 3PLs claimed 19 percent.
Along the Pennsylvania I-78 and I-81 corridor, 3PLs comprised some 46 percent of leasing activity, while e-commerce accounted for 27 percent, the report said. CBRE said the activity points toward stable industrial markets within the Northeast during the current crisis.
“Looking forward, e-commerce will continue to be the biggest catalyst for both demand and innovation in industrial real estate over the next cycle,” the firm wrote in its research note. “Increasing demand for goods bought online, especially food, will fuel the need for modern distribution facilities at a pace much higher than the previous cycle.